Spanish
PM says national interest is key to future of Endesa
By Chris Wright
AFP
MADRID
Petroleumworld.com
02 23 06
Spanish Prime Minister Jose Luis Rodriguez Zapatero expressed
reticence on Wednesday about a takeover bid for leading domestic
electricity group Endesa by E.ON of Germany, saying national interest
was paramount.
"The international rules of the game are paramount, yet must
be compatible with reasonable national interest," Zapatero
said of the 29.1-billion-euro (34.6-billion-dollar) bid which
has thrown into doubt his strategy of seeing the creation of a
national energy champion.
The bid by E.ON is worth 29.0 percent more than an earlier bid
by Spanish utility Natural Gas. However, the Spanish government
has said that it would not use a so-called "golden share"
to block the E.ON offer.
"Markets are very important but for the government the citizens
are more so," Zapatero said, having Tuesday night personally
told E.ON chairman Wulf Bernotat he wanted to see Spanish ownership
of a merged energy utility.
That position, coupled with comments from Zapatero's office late
on Tuesday that the government was "worried" about the
E.ON deal, had suggested that the government opposed the German
bid, but a government spokeswoman said that such a view was premature.
"We're not yet at that stage. The important thing is to analyse
the situation and the repercussions it (the E.ON bid) would have
on the sector," the spokeswoman told AFP.
She said that the view that the government opposed the bid by
E.ON was an "interpretation" which the media had placed
on the events of the past two days.
But she also said that the clearly-stated desire to keep key utilities
in Spanish hands meant Madrid was "not so happy to see an
offer come from abroad" and that a domestic bid "would
be ideal".
Senior governing Socialist Party official Alfredo Perez Rubalcaba
had said on Tuesday that Madrid would apply "the same criteria"
to the case as it had earlier with Spain's Gas Natural, which
had made the first bid of 22.5 billion euros.
In another twist, Endesa shares rose on reports that Enel of Italy
might come to help Gas Natural if it increased the terms of its
offer.
If the E.ON deal goes through it would result in the creation
of the world's leading power and gas supplier.
The Spanish government currently maintains a golden share in Endesa
but Spanish legislation to scrap it is in the pipeline following
an EU ruling making such state holdings illegal and the government
spokeswoman said its use could be "totally ruled out".
Zapatero said the government did "not envisage" deploying
it in a bid to halt the German bid.
Gas Natural said late on Tuesday that it would maintain its bid
but Endesa said following a board meeting that "the board
considers that it (the offer) does not adequately reflect the
true value of Endesa".
Earlier, pro-government daily El Pais said in a front page headline
that "Zapatero has comunicated to E.ON his opposition to
the offer for Endesa".
El Pais added Madrid was "seeking legal means" to keep
Endesa, which employs 27,200 compared with E.ON's 79,950, in Spanish
hands.
Christian Democratic Barcelona-based La Vanguardia expressed the
view that "the gouvernment is trying to put the brakes on
the German bid for Endesa", while conservative daily La Razon
predicted that "the executive will intervene" to stop
the bid.
According to El Pais, one potential means available to Zapatero
was the use of a 1997 hydrocarbons law allowing the energy regulator
to examine the consequences of a bid which would affect issues
such as the transportation and distribution of energy.
A further legal measure the goverment could deploy is a ruling
forbidding the entry into the energy sector of foreign enterprises
in which their home state has a capital stake.
The German federal state of Bavaria holds a small stake in E.ON.
AFP
02 22 06
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© 2006 AFP. All rights reserved
